Connecticut Legislation

Effective Monday, July 1, 2024 the state of Connecticut requires commercial financing providers to deliver a “Sales-Based Financing Disclosure Form” to small businesses in their state before entering into a revenue-based financing transaction. Because Forward Financing provides this type of product, we must follow this law and provide each Connecticut-based customer a disclosure form to further help them make an informed decision.

Here is an example of the disclosure form. (need updated link for CT)

Connecticut requires funders like Forward Financing to provide a disclosure form to any customer with a business address in the state.

Forward will provide every small business in Connecticut with the disclosure form at the same time as the funding contract. In most cases, whether working with an ISO or directly with Forward, the customer will receive two separate emails simultaneously – one with the disclosure form and one with the contract.

Most of the information on the Connecticut disclosure form is also included on the front page of Forward’s contract. However, Forward must comply with state law and will automatically share the appropriate disclosure form with customers in addition to our contract via a separate email. Our ISOs should ensure they are familiar with this state-required form so they’re able to answer any questions customers might have.

This commercial financing law also includes a broker code of conduct with an effective date of July 1, 2024. Among these rules a broker cannot:

• Collect fees from applicants aside from ones related to services actually performed (e.g., credit check fee)
• Make misrepresentations or omit facts to an applicant
• Make false statements in business dealings
• Advertise services without disclosing the actual address and phone number of the business of the broker

Non-compliance could result in fines and enforcement by the attorney general. Learn more about these new rules for brokers here (need updated link for CT). As always, ISOs should contact their own legal counsel for how laws impact them directly.

ISOs are encouraged to contact their Account Manager with any questions regarding Forward’s change in processes related to this Connecticut legislation. Further information on the new law can be found here. (need updated link for CT)

Customers working with an ISO and funding with Forward for the first time are encouraged to contact their ISO with questions on any documentation requirements, including this disclosure form. Customers who are working directly with Forward Financing are welcome, as always, to reach out to their Account Executive with any questions or concerns.

While none of us know for sure what legislation will or will not be passed, we can share our steadfast commitment to delivering financial opportunity to small businesses and being transparent and ethical in doing so.

We are involved in these discussions and closely monitoring any legislation that could affect our customers and ISOs. We will keep ISOs informed as decisions are made and will help them navigate any changes to how they work with Forward and the customers we share.